Alibaba.com CEO David Wei and COO Elvis Lee resign

Jonathan Lu, the CEO of Taobao, Alibaba.com's sister company, was named as Wei's replacement. Lu, an 11-year veteran of Alibaba Group, which owns Taobao and Alibaba.com, will continue to serve as Taobao's chief executive. No replacement was named for Lee.

According to company officials, Wei and Lee resigned in the wake of an internal investigation that found Alibaba.com's senior management did not get to the root cause of a "noticeable increase" last year in the number of fraud cases being reported against suppliers selling products via the Hangzhou-based company's international trading website.

Alibaba.com is an online marketplace that allows businesses to market their merchandise or source products over the Internet.

The investigation, launched by the company's board of directors in mid-January and led by independent director Savio Kwan, focused on a group of Alibaba.com sales employees who "willfully or negligently" helped organised Chinese criminal rings establish Alibaba.com 'Gold Supplier' storefronts so they could pose as legitimate businesses in order to defraud buyers, said a source close to the matter.

Alibaba.com did not disclose the status of nearly 100 employees out of the company's 5000-strong sales force who are suspected of abetting fraud, saying only that many have been terminated and the investigation is ongoing.

Alibaba.com is listed on the Hong Kong Stock Exchange. In a filing with the exchange today disclosing the management changes, Alibaba.com chairman Jack Ma said that Wei and Lee, while not involved in the fraudulent activities, "did the honorable thing by accepting full responsibility" for what the company described as a "systemic breakdown of [Alibaba.com's] culture of integrity."